K.S.Hanumantha Rao , Bangalore V. The Principal Commissioner of Income Tax-2, Bangalore

ITA 1164/BANG/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 4187 (ITAT-BANGALORE)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 09-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MUZAFFAR HUSSAIN
• Assessee Lawyers: S V RAVISHANKAR; K S HANUMANTHA RAO S
• Keywords: Opportunity of being heard; Principle of natural justice; Set aside; Capital Gains
• Section: 143(3); 54; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V VASUDEVAN, VICE PRESIDNET AND SHRI B.R BASKARAN, ACCOUNTANT MEMBER ITA NO.1164/BANG/2018 ASSESSMENT YEAR : 2013-14 SHRI K.S HANUMANTHA ROAD, 378, JAMADAGNI, 16A MAIN ROAD, 36A CROSS, 4 TH T BLOCK, JAYANAGAR, BANGALORE-560 041. PAN AACPH 3083 Q VS. THE PR. CIT. COMMISSIONER OF INCOME- TAX, BANGALORE-2, BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI S.V RAVISHANKAR & SHRI K.S HANUMANTHA RAO, ADVOCATES REVENUE BY : SHRI MUZAFFAR HUSSAIN, CIT (DR) DATE OF HEARING : 27.02.2020 DATE OF PRONOUNCEMENT : 28.02.2020 O R D E R PER B.R BASKARAN, ACCOUNTANT MEMBER THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAI NST THE REVISION ORDER DATED 21/3/2018 PASSED BY LD PR. CIT , BENGALURU-2 U/S 263 OF THE ACT AND IT RELATES TO THE ASST. YEAR 2013-14. 2. WE HEARD THE PARTIES AND PERUSED THE RECORD. TH E ASSESSMENT IN THE HANDS OF THE ASSESSEE FOR THE YEA R UNDER CONSIDERATION WAS COMPLETED BY THE AO U/S 143(3) OF THE ACT ON 04/3/2016. THE LD PR. CIT NOTICED THAT THE ASSESSE E HAS DECLARED ITA NO.1164/BANG/2018 PAGE 2 OF 5 LONG TERM CAPITAL GAIN ON SALE OF HOUSE PROPERTY AN D ALSO CLAIMED DEDUCTION U/S 54 OF THE ACT IN RESPECT OF INVESTMEN T MADE IN PURCHASING ANOTHER RESIDENTIAL PROPERTY. THE LD PR .CIT ALSO NOTICED THAT THE INTEREST INCOME OF RS.15,201/- WAS APPEARI NG IN FORM NO.26AS, BUT IT WAS NOT DISCLOSED BY THE ASSESSEE I N THE RETURN OF INCOME. 3. THE LD PR.CIT NOTICED THAT THE HOUSE PROPERTY SOLD BY THE ASSESSEE WAS PURCHASED BY HIM ON TWO DIFFERENT DATE S IN TWO PORTIONS. THE FIRST PORTION WAS PURCHASED ON 27/2/ 1989 AND THE SECOND PORTION WAS PURCHASED ON 29/10/2009. THE AS SESSEE HAD SOLD BOTH THE PORTIONS OF THE PROPERTY ON 24/5/2012 AND DECLARED LONG TERM CAPITAL GAINS. THE LD PR. CIT NOTICED TH AT THE SECOND PORTION WAS PURCHASED BY THE ASSESSEE ON 29/10/2009 AND HENCE THE SAME WAS HELD FOR LESS THAN 3 YEARS ON THE DATE OF SALE OF PROPERTY. ACCORDINGLY THE LD PR.CIT TOOK THE VIEW THAT GAIN ARISING ON SALE OF SECOND PORTION WAS SHORT TERM CAPITAL GA IN AND HENCE THE ASSESSEE WILL NOT BE ELIGIBLE TO CLAIM THE BENEFIT OF INDEXATION. 4. THE LD PR.CIT ALSO NOTICED THAT THE NEW RESID ENTIAL HOUSE PURCHASED BY THE ASSESSEE, IN RESPECT OF WHICH DEDU CTION U/S 54 OF THE ACT WAS CLAIMED, WAS PURCHASED PRIOR TO ONE YEA R FROM THE DATE OF SALE OF HOUSE PROPERTY. AS PER THE PROVISIONS O F SEC.54 OF THE ACT A NEW RESIDENTIAL HOUSE PURCHASED WITHIN ONE YEAR F ROM THE DATE OF SALE OF OLD PROPERTY ALONE IS ELIGIBLE FOR DEDUCTIO N U/S 54 OF THE ACT. ACCORDINGLY HE TOOK THE VIEW THAT THE ASSESSEE IS N OT ELIGIBLE FOR DEDUCTION US/ 54 OF THE ACT ALSO. ITA NO.1164/BANG/2018 PAGE 3 OF 5 5. THE LD PR.CIT NOTICED THAT THE AO HAS NOT EXA MINED ALL THESE ISSUES AND ACCORDINGLY TOOK THE VIEW THAT THE ASSES SMENT ORDER PASSED BY THE AO IS ERRONEOUS AND PREJUDICIAL TO TH E INTEREST OF REVENUE. ACCORDINGLY HE INITIATED REVISION PROCEED INGS U/S 263 OF THE ACT. 6. WE HEARD THE PARTIES AND PERUSED THE RECORD. WE NOTICED THAT THE LD PR. CIT HAS INITIATED PROCEEDINGS ON 18 /1/2018 BY ISSUING NOTICE TO THE ASSESSEE. IN THE SAID NOTICE THE ASSESSEE WAS ASKED TO APPEAR BEFORE HIM ON 30/1/2018. ACCORDING TO LD AR, THE ASSESSEE DID NOT APPEAR ON THAT DATE AND SOUGHT FOR ADJOURNMENT. ACCORDING TO LD AR, THE LD PR. CIT ADJOURNED THE MA TTER TO 20/3/2018 ON WHICH DATE ALSO THE ASSESSEE DID NOT A PPEAR AND SOUGHT TIME. IT WAS STATED THAT THE ASSESSEE FELL ILL. HOWEVER THE ASSESSEE FILED WRITTEN SUBMISSIONS BEFORE LD PR. CI T OBJECTING TO THE REVISION PROCEEDINGS ON 26/3/2018. HOWEVER IT CAME TO THE NOTICE OF THE ASSESSEE LATER THAT THE LD PR. CIT(A) HAD PA SSED THE REVISION ORDER ON 21/3/2018 ITSELF. 7. FROM THE SEQUENCE OF EVENTS NARRATED ABOVE, WE N OTICED THAT THERE WAS NO OCCASION FOR PR. CIT TO EXAMINE THE OB JECTIONS FILED BY THE ASSESSEE BEFORE HIM ON 26/3/2018. ACCORDING TO LD AR, THE ASSESSEE HAD SOUGHT TIME ON 20/3/2018 ALSO BUT THE SAME WAS NOT CONSIDERED BY LD PR. CIT. UNDER THESE SET OF FACTS, IN THE INTEREST OF NATURAL JUSTICE, WE ARE OF THE VIEW THAT THE ASSESS EE SHOULD BE GIVEN AN OPPORTUNITY TO PRESENT HIS CASE BEFORE LD PR. CI T. ACCORDINGLY WE SET ASIDE IMPUGNED REVISION ORDER PASSED BY LD PR.C IT AND RESTORE ALL THE ISSUES TO HIS FILE FOR EXAMINING THEM AFRES H, AFTER AFFORDING ITA NO.1164/BANG/2018 PAGE 4 OF 5 ADEQUATE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE . WE ALSO DIRECT THE ASSESSEE TO EXTEND COOPERATION TO LD PR. CIT FO R EXPEDITIOUS DISPOSAL OF THE MATTER. ACCORDINGLY ALL THE ISSUES ARE KEPT OPEN. 8. IN THE RESULT, THE APPEAL FILED BY THE ASSES SEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 28 TH FEBRUARY 2020. SD/- (N.V VASUDEVAN) VICE PRESIDENT SD/- (B.R BASKARAN) ACCOUNTANT MEMBER BANGALORE, DATED, 28 TH FEBRUARY, 2019. / VMS / COPY TO: 1. THE APPLICANT 2. THE RESPONDENT 3. THE CIT 4. THE CIT(A) 5. THE DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER ASST. REGISTRAR, ITAT, BANGALORE ITA NO.1164/BANG/2018 PAGE 5 OF 5 1. DATE OF DICTATION 2. DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER . 3. DATE ON WHICH THE APPROVED DRAFT COMES TO SR.P.S .. 4. DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER .. 5. DATE ON WHICH THE FAIR ORDER COMES BACK TO THE S R. P.S. .. 6. DATE OF UPLOADING THE ORDER ON WEBSITE.. 7. IF NOT UPLOADED, FURNISH THE REASON FOR DOING SO .. 8. DATE ON WHICH THE FILE GOES TO THE BENCH CLERK .. 9. DATE ON WHICH ORDER GOES FOR XEROX & ENDORSEMENT 10. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK . 11. THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER . 12. THE DATE ON WHICH THE FILE GOES TO DISPATCH SEC TION FOR DISPATCH OF THE TRIBUNAL ORDER . 13. DATE OF DESPATCH OF ORDER. ..